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To Tom and all,
Clarifications on system:
1. MACD parameters are: Signal Time Periods: 14 and Moving average
(Exponential) of 9 days on the indicator (MACD).
2. It is true that it was tested only for longs. It is impossible to private
investors to short in our market and even in US when using a local account.
3. It is true that in flat market it is not working and that is why we need
confirmations with the equity Moving averages and some other momentum
indicators. I mentioned the RSI as example.
4. When I wrote > 0 I meant above the zero line.
Moshe Shalom
Israel
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]
On Behalf Of Tom Strickland
Sent: Monday, April 03, 2000 4:56 PM
To: metastock@xxxxxxxxxxxxx
Subject: Re: System
Moshe,
A few questions and comments:
1. What does MACD(14) mean? MACD requires two parameters, the time lengths
of the short-term and long-term moving averages.
2. The system you describe is similar to the standard interpretation of the
MACD indicator for long positions. However, if you wait until the MACD
crosses its moving average AND MACD>0, you may miss the whole move. The
MACD might cross its average before it crosses zero. I'd suggest you look
at buying when MACD is above both zero and its moving average.
3. Some recommend that you buy when the MACD crosses its moving average,
regardless of which side of zero it on. This is a more aggressive approach.
I prefer to wait until MACD is positive or at least there is a clear
indication that the price is moving up.
4. The MACD method should work for all trending markets. However, you are
likely to get whipsawed when the market is locked into a trading range.
5. You didn't say anything about going short. Do you only trade the long
side of the market?
Hope you find this useful.
Tom
At 12:04 PM 4/3/2000 +0200, you wrote:
>Hi Listers,
>
>I am newbie and I know that but I tested on paper the following system for
>the DIJA:
>
>Buy on MACD (14) cross over with Moving Average (9) but only when MACD > 0
>Confirmation by Moving Averages 13/50/200 on Index chart
>
>Sell on MACD cross below MA OR MACD going under 0
>Confirmation on correct RSI (20) trend
>
>It seems to catch the big movements. Any comments will be appreciated.
>
>Moshe Shalom
>Israel
>
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